Rothstein Kass Report Finds Single-Family Offices Planning to Increase Alternative Investment Industry Allocations

ROSELAND, N.J. and NEW YORK, June 15, 2011 /PRNewswire/ -- The Rothstein Kass Family Office Group (http://www.rkco.com/Site/FamilyOffices/CorpContent.aspx), a division of global professional services firm Rothstein Kass (www.rkco.com), today announced publication of "Raising Capital from Single-Family Offices – Considerations for Financial Firms," an extensive study of the evolving relationship between the single-family office (SFO) and investment management sectors. Co-authored by Forbes Insights and Russ Alan Prince, a leading authority on private wealth, the report features the findings of a survey of 151 Executive Directors at single-family office operations for their perspectives on an array of topics impacting their businesses. Participants were polled in the first quarter of 2011 and were required to have current allocations to the hedge fund or private equity sectors. The report also references earlier proprietary research demonstrating that single-family offices are increasingly appealing sources of capital to investment managers and investment bankers to provide a more complete overview of emerging trends.

"The unified approach to wealth management continues to resonate with high-net worth individuals and families, many of whom rely on investment allocations to fund a wide range of family concerns, including estate planning, philanthropic activities and lifestyle management. They increasingly found that a single-family office is ideally suited to manage these interrelated functions within a centralized structure," said Rick Flynn, head of the Rothstein Kass Family Office Group. "Today, single-family offices represent vast pools of wealth – both individually and in aggregate. The objective-driven approach pervasive among the single-family office community only amplifies its allure by providing investment managers with access to capital with long-term investment horizons."

Approximately 85 percent of single-family offices surveyed for "Raising Capital from Single-Family Offices" currently invest in hedge funds, with roughly half reporting active private equity sector investments. Among notable findings:

• Mean investable assets of single-family offices stands at roughly $416 million in 2011, up from approximately $236 million reported in 2010
• Nearly all single-family offices rely on external investment management professionals, with roughly 22 percent also indicating internal investment management capacity
• Nearly 90 percent of Executive Directors surveyed suggest that they are highly likely to place additional money into hedge funds this year. The most popular strategies are long / short equity (53 percent), distressed (49 percent), arbitrage (33 percent), managed futures (25 percent), and global macro (25 percent)
• Almost 70 percent of survey participants plan to increase allocations to the private equity sector in 2011. Investment preferences are likely to include established companies (59 percent), mezzanine financing (39 percent) and second-round financing (32 percent)

"One of the greatest challenges in understanding the single-family office sector arises in defining its scope. Surging interest in the space has compelled a variety of wealth management firms to market themselves as family office providers, contributing to widely disparate notions of what these structures encompass," said Mr. Flynn. "Our latest report illustrates the range of services typically offered by a typical single-family office entity. Among shared characteristics, the most successful ventures recognized that the Executive Director is critical to cohesive management. Though the title can vary, the Executive Director often serves as a quarterback for the wealth management team. More frequently, this individual is exerting greater influence regarding investment decisions and due diligence processes. As a result, investment managers seeking to raise capital from the single-family office community are best-served by adopting a consultative approach – one that consider investment orientation alongside long-term objectives to gain insight into the 'professional ecosystem' at work."

About Rothstein Kass:

Rothstein Kass is a premier professional services firm that has served privately held and publicly traded companies, as well as high-net worth individuals and families, for over 50 years. As trusted advisors to our clients, Rothstein Kass provides accounting, auditing and tax services, as well as a full array of integrated services, to clients across industry spectrums and in all stages of organizational development.

The Rothstein Kass Family Office Group offers a wide range of financial, wealth planning and lifestyle management services to family offices and high-net-worth individuals. Composed of seasoned financial professionals and certified public accountants, the Family Office Group applies proven expertise with the utmost discretion and attention. Clients include general partners of hedge funds and private equity funds, single-family offices and other segments of the high-net-worth community. The Rothstein Kass Family Office Group helped to pioneer the celebrity family office sector, and is also a specialist in serving the needs of athletes and entertainers. A division of the Rothstein Kass Commercial Services Group, the Family Office Group does not provide investment allocation, asset management or advisory services.

SOURCE Rothstein Kass

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